For those not intimately familiar with the CMS policy, in 2009, Congress passed the Health Information Technology for Economic and Clinical Health (HITECH) Act. The program, administered through CMS and state Medicaid programs, created financial incentives for doctors (and other eligible professionals) and hospitals to adopt and “meaningfully use” a certified electronic health record (EHR). To receive financial incentives, which began to be paid in May 2011, doctors and hospitals “attest” that they have met the meaningful use requirements, providing an affirmation for which they are held legally accountable.

The process works as follows: health care providers visit a CMS website, register, and enter data demonstrating that their EHRs are “certified” and that they met each of the individual requirements for meaningful use. Then they attest that that all the data they entered is true. For example, a physician might have to report, to meet just one of the 20 meaningful use measures, how many prescriptions she wrote over the past 90 days, and how many she wrote electronically. My conversations with colleagues suggest that it can take a lot of time for providers to gather all the data they need to “attest” to meeting Meaningful Use. Then, CMS runs logic checks to ensure that the numbers entered make sense and, if there are no errors, they cut the provider a check. Through September, 2012, CMS paid out about $4 billion in incentives to 82,000 professionals and more than 1,400 hospitals.

What The Office Of Inspector General Recommended …

The Office of Inspector General examined how carefully CMS is overseeing this program, with particular interest given the reliance on self-reporting of meaningful use, and found areas for improvement. Several of the OIG recommendations for improving oversight are sensible, measured, and very likely to improve the integrity of the program. For instance, OIG recommends that CMS provide detailed guidance to providers about what constitutes adequate documentation to support their attestation. This is the equivalent of the IRS providing guidance on what documentation you need to prove that your tax deductions are legitimate. Another reasonable OIG recommendation is that certified EHRs be able to produce automated reports about all the functions required to meet meaningful use. I suspect this will not be particularly onerous for EHR vendors to meet.

… And Where OIG Went Wrong

Where the OIG goes astray is their recommendation that CMS “obtain and review supporting documentation” from selected doctors and hospitals prior to payment. This is the equivalent of the IRS asking a large chunk of Americans to send in their receipts and detailed explanations along with their 1090s before they get their refund. Based on the screening tool discussed in the OIG report, about 100,000 physicians and 800 hospitals would be subject to creating these detailed reports with a large amount of supporting evidence each year — and CMS would need to add a substantial number of staff to review all these reports before making any payments.

CMS chose not to concur with this recommendation, and I think CMS is right. There is little evidence to date of any fraud, waste, or abuse in the EHR incentive program. Were they to follow this OIG recommendation, CMS would effectively make waste in the program more likely.

This is not to say that there are not areas in which CMS should be more aggressive in their oversight. Indeed, CMS pays out more than $500 billion in taxpayer money each year for medical care, and there is ample evidence that a substantial proportion of that money goes to health care services that harm our nation’s elderly while providing little clinical benefit — that’s the real “waste, fraud, and abuse.” We continue to pay billions for poor quality and unsafe care. CMS needs to develop more sophisticated and nuanced approaches to ensuring that it pays more for better care, pays less for poor quality care, and protects not only the taxpayer dollar, but also the health of Medicare beneficiaries. That’s worth getting aggressive about.

CMS’s Approach On EHR Payments Strikes The Right Balance

Given that there is no evidence that doctors and hospitals are systematically committing federal fraud by reporting that they are meaningfully using EHRs when they are not, CMS has instead planned a post-payment audit. And if physicians or hospital executives are found to have deliberately and consciously lied in order to get incentives, they should be prosecuted. If they made an honest mistake — and given the complexity of meaningful use criteria, this is a real possibility — they should give the money back and potentially pay a fine. But creating a huge new burden will dissuade many providers from even adopting EHRs, and continuing to rely on paper records is no way to deliver health care. The cost of the latter to the American public, in terms of duplicate tests, medical errors, and general poor quality care, is far more substantial.

In each regulatory decision, there is a balancing act: have too few checks and there will be widespread fraud; be overly heavy-handed and you may end up penny-wise and pound-foolish. The approach that CMS seems to be taking is, in the famous words of President Reagan, “trust, but verify.” Trust that providers are being honest – but verify through selected audits. It appears to get the balance right. This approach was good enough for President Reagan’s dealings with the Soviet Union and I suspect that it’s good enough for CMS’s dealings with doctors and hospitals.

I’ve been getting emails about theNew York Times piece and my quotation that the penalties for readmissions are “crazy.” It’s worth thinking about why the ACA gets hospital penalties on readmissions wrong, what we might do to fix it—and where our priorities should be.

A year ago, on a Saturday morning, I saw Mr. “Johnson,” who was in the hospital with a pneumonia. He was still breathing hard but tried to convince me that he was “better” and ready to go home. I looked at his oxygenation level, which was borderline, and suggested he needed another couple of days in the hospital. He looked crestfallen. After a little prodding, he told me why he was anxious to go home: his son, who had been serving in the Army in Afghanistan, was visiting for the weekend. He hadn’t seen his son in a year and probably wouldn’t again for another year. Mr. Johnson wanted to spend the weekend with his kid.

I remember sitting at his bedside, worrying that if we sent him home, there was a good chance he would need to come back. Despite my worries, I knew I needed to do what was right by him. I made clear that although he was not ready to go home, I was willing to send him home if we could make a deal. He would have to call me multiple times over the weekend and be seen by someone on Monday. Because it was Saturday, it was hard to arrange all the services he needed, but I got him a tank of oxygen to go home with, changed his antibiotics so he could be on an oral regimen (as opposed to IV) and arranged a Monday morning follow-up. I also gave him my cell number and told him to call me regularly.

Much of the weekend went smoothly. When I talked to him on Sunday morning, he reported having slept poorly but had a joyful tone in his voice that I never heard in the hospital. He was planning on having a few beers with his son and watching the Patriots game. I told him to take it easy on the beers.

Sunday afternoon, I caught him during half-time and he assured me everything was fine.

On Monday morning, I got a call that Mr. Johnson was back in the hospital. I rushed to his room to see him lying in bed, looking sad. He told me that his breathing had gotten worse overnight and at 3 a.m. his son drove him to the hospital. His vital signs looked fine, although his oxygenation was a little worse than Saturday. He screwed up, he said, and told me I’d been right. He should not have gone home. I asked if he had enjoyed the weekend, and his face lit up. He had loved it. Let’s be clear: he had been right to go home. There was no screwup. We had gotten him a weekend at home with his son, who would soon be heading back to Afghanistan.

In 2012, more than 100,000 Americans will die in U.S. hospitals because of medical errors such as preventable infections, receiving the wrong drug, or having the wrong surgery. Even more Americans will likely die because they failed to get simple therapies like the right antibiotic for their pneumonia. Millions of people will report suffering in the hospital from undertreated pain or the indignities of not being always treated with respect. Yet the Affordable Care Act says that my “mistreatment” of Mr. Johnson—sending him home and having him come back—was far more egregious and deserves the biggest penalties. While the ACA is extremely important in improving access to millions of Americans, several of the provisions to improve the “delivery system” are not quite right. The notion that readmitting people to the hospital is worse than killing them due to medical errors? Sorry, but that is crazy.

The Leapfrog Group will soon be putting out another report of patient safety in U.S. hospitals (I’m on their advisory panel). It will provide letter grades on the state of safety of every hospital. The grading system is not perfect—primarily because hospitals are not required to report their rates of medical errors. Yet Leapfrog soldiers on, trying to make their best assessment. I wish Medicare would make patient safety half as much of a priority as reducing readmissions. Oh, and by the way? Reducing medical errors can likely save us a lot more money than reducing readmissions—so even if we do it for the money, that should be our target.

So—should we penalize hospitals for readmissions? I think it’s probably fine (although we should know that we will primarily end up penalizing hospitals that care for the sickest and poorest patients). But by putting so much energy on readmissions and so little on patient safety, we have made our priorities clear, and I think they are the wrong priorities.

If my hospital had made my readmission rate part of my performance evaluation, would I have sent Mr. Johnson home that weekend? Maybe not. I could have easily strong-armed him into staying, and he would have listened. He was, what we call, a “compliant” patient. But if we had kept him in the hospital, he would have lost the chance to watch the Pats game with his son. His son and family would have lost having the weekend with their dad and husband. But I would have “won,” coming across as a better doctor for having a lower readmission rate.

Policies have consequences. They set up subtle, often perverse incentives. Before we decide that readmissions are the biggest priority for cleaning up American hospitals, we should ask whether Mr. Johnson should have been sent home that weekend.

Currently, India spends about $20 per person per year on healthcare and spending more once seemed like a peripheral concern, taking a back seat to basics like food and sanitation. However, in the past decade, as the Indian economy has grown and wealth followed, Indians are increasingly demanding access to “high quality” healthcare. But what does “high quality” mean for a country where a large proportion of the population still goes hungry? Where access to sanitation is so spotty that the Supreme Court recently had to decree that every school should have a toilet? What is “high quality” in a setting where so many basics have not been met?

It turns out that “high quality” may mean quite a lot, especially for the poor. A few weeks ago I spent time in Delhi, meeting with the leadership of the Indian health ministry. I talked to directors of new public medical schools and hospitals opening up around the country and I met with clinicians and healthcare administrators at both private and public hospitals. An agenda focused on quality rang true with them in a way that surprised me.

The broad consensus among global health policy experts is that countries like India should focus on improving “access” to healthcare while high income countries can afford to focus on the “quality” of that care. The argument goes that when the population doesn’t have access to basic healthcare, you don’t have the luxury to focus on quality. This distinction between access and quality never made sense to me. When I was a kid in Madhubani, a small town in in the poor state of Bihar, I remember the widespread impressions of our community hospital. It was a state-run institution that my uncle, a physician, once described as a place where “you dare not go, because no one comes out alive”. His point was that the quality was so awful that patients were routinely injured or even killed by medical errors. People avoided it until they were at death’s door. For the people of Madhubani, was this an “access” problem or a “quality” problem? It was clearly both and the split between access and quality also made no sense to them.

The Indian parliament is now debating its 12th 5-year plan (yes, the government still relies on Soviet-style 5-year plans) which would increase government spending on healthcare from 1% of GDP to 1.6%, a sizable amount (although I think they should be spending a lot more). Much of this new spending is focused on access: ensuring “universal health coverage” and strengthening primary care. These are good things. However, at least some part of the spending should be dedicated to measuring quality. A basic information infrastructure that tracks not just who received care but also the kind of care they received and if it did them any good is vital. Without answers to these questions, we will never know how much of the new investment improved health and how much was wasted.

Measuring quality has to be a part of a broader strategy that closely tracks health of the population. Health outcomes measures will allow policymakers to decide when additional resources need to go into public health, when they need to be spent on direct healthcare (i.e. improving access) and when they need to be spent ensuring that the care is good (i.e. quality). Measuring health outcomes and making those data widely available to the public will reduce the risk that the extra spending is wasted by a corrupt political system. It will hold policymakers accountable to the bottom line: improving the health and well-being of the population.

Two decades ago, Americans believed that having a licensed physician care for you at an accredited hospital assured quality. Yet years of relentless data suggesting otherwise has changed the way we think. We now know that an accredited hospital with licensed physicians can have mortality rates four times higher than another hospital across the street. This variation has a huge cost, leading to unnecessary deaths and wasted resources. Regulation, while a prerequisite, does not assure high value healthcare. That is the most important lesson for Indian healthcare. If India wants a robust healthcare system that delivers high quality healthcare at a reasonable cost, it needs a quality strategy with robust measurement of processes, outcomes and costs. This kind of approach is necessary for any society that does not wish to pour large sums of money into wasted care.

My previous question about how we can ask focus on quality when food and sanitation are still not always available, presents us with false choices. The failure to get clean water to every household is not one of resources, but of effective governance. Poor quality schools would certainly be made better with more spending, but would be dramatically improved with greater accountability. The notion that India doesn’t have the resources to measure and ensure quality actually creates a huge risk. If India goes down the road of widespread healthcare access expansion without concurrently focusing on quality, it will likely waste an immense amount of resources and lives. For the U.S., this has meant hundreds of billions of dollars of waste and tens of thousands of unnecessary deaths each year. As India thinks about making greater investments in healthcare, the question cannot be whether it can afford to measure and ensure high quality care. The real question is – can it afford not to?